Credit Union Loans

For Financing Commercial Real Estate
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Credit Union Loans for Commercial Real Estate

CRE borrowers have traditionally turned to banks for commercial loans, however recent regulatory changes have given credit unions more freedom to engage in commercial lending.  Credit unions now offer commercial mortgages that compare favorably with local banks.  While credit unions are still relatively inexperienced with commercial real estate lending, finding credit unions that are eager to expand their lending can be a boon for a borrower.  Due to the tax-exempt status of credit unions, they will in some cases be able to offer lower rates or fees than banks. In addition, federal credit unions cannot charge prepayment penalties on loans.

Credit unions are able to offer a wide variety of commercial loan products that are similar to banks in their terms, rates, and maximum leverage. However, even more so than local banks, credit unions are interested in making real estate loans that help them to build relationships with their customers.  This makes credit union loans the best fit for local borrowers, owner-occupied properties, and SBA loans.

Loan Amount:

$250,000 to $10 Million+

Max LTV:

60% - 80%

Typical Term:

5, 7, or 10 years
  • Competitive with bank loans
  • Recourse and non-recourse options
  • Great fit for borrowers that want to build a relationship
  • Smaller loan amounts possible

Personal Financial Statement (for Guarantors)
Pro Forma Financials
  • Acceptable borrower/guarantor credit score
  • Sufficient equity invested into the deal
  • Cash flow or a strong and reasonable pro forma
  • Local borrowers preferred

How to Get a Credit Union Loan

Getting a commercial real estate loan is often not as simple as walking into a local credit union. The 5000+ credit unions in the US take many different approaches to commercial lending. Some have in-house lending teams, some share lender teams as members of a CUSO (Credit Union Service Organization), and others generally avoid CRE loans. You can waste a lot of time trying to approach credit unions one at a time. StackSource is built to connect borrowers to the right decision makers at credit unions in our lender network. Your StackSource Capital Advisor will guide you through the loan process and help you score the best loan for your property.

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Guide to Commercial Real Estate Credit Union Loans

Owner-occupier Loans

Credit union loans can be a great fit for business that want to own their property including retail, office, and industrial buildings. For commercial properties to qualify as being "owner-occupied", the owner must use at least 51% of the square footage for the owner's own business.  

Acquisition and Refinance Loans

Local borrowers can use credit union loans to acquire or refinance a cash-flowing asset.  Credit unions prefer to work with local borrowers (in the same state or local area) in order to build a larger relationship. If you're looking to build a relationship, a credit union can net you very favorable terms.  Like a bank loan, a credit union loan will usually take several months from engagement to closing, so it is a good idea to get started on the loan process well in advance of the closing or balloon payment date.

SBA Loans

Some credit unions lend under the SBA 7(a) and SBA 504 loan programs.  Learn more about SBA loans.

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Further reading